Thursday, March 28, 2013

Broyhill Asset Management recently released its research on shares of Coach (COH). They're bullish on the company and classify it as a classic compounder.

Broyhill writes,

"Coach currently trades at 8.3x EBIT, 13.0x current and 11.7x forward earnings. In other words, the stock is priced as if Coach’s growth is long in its past. At its peak in 2001, shares fetched 32 times earnings. If we assume that Coach ultimately trades back towards its average forward multiple of 15x over the next three years, we estimate the stock is worth $76.60 in our base case, which represents more than 50% upside potential. In our bull case, upside is significantly greater."

Broyhill's thesis on this handbag retailer is pegged on three growth drivers: the ascent of affordable luxury, continued brand extension, and ongoing international expansion.

They feel a short-term shift in investor sentiment has created an entry point for long-term investors. Their report, embedded below, highlights industry dynamics, competitive positioning, and executive leadership.

Broyhill Asset Management recently released its research on shares of Coach (COH). They're bullish on the company and classify it as a classic compounder.

Broyhill writes,

"Coach currently trades at 8.3x EBIT, 13.0x current and 11.7x forward earnings. In other words, the stock is priced as if Coach’s growth is long in its past. At its peak in 2001, shares fetched 32 times earnings. If we assume that Coach ultimately trades back towards its average forward multiple of 15x over the next three years, we estimate the stock is worth $76.60 in our base case, which represents more than 50% upside potential. In our bull case, upside is significantly greater."

Broyhill's thesis on this handbag retailer is pegged on three growth drivers: the ascent of affordable luxury, continued brand extension, and ongoing international expansion.

They feel a short-term shift in investor sentiment has created an entry point for long-term investors. Their report, embedded below, highlights industry dynamics, competitive positioning, and executive leadership.

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